Metro Vancouver municipal governments have created a $90 million liability by agreeing to generous sick pay provisions that allow employees to bank sick days when they don’t use them

Jeff Lee

Updated: December 21, 2016

The Canadian Federation of Independent Business says the practice of allowing municipal workers in the City of Vancouver and elsewhere in the region to bank sick days is an expensive perk that causes a large liability for taxpayers.Arlen Redekop / PNG

Metro Vancouver municipal governments have created a $90 million liability by agreeing to generous sick pay provisions that allow employees to bank sick days when they don’t use them, the Canadian Federation of Independent Business said Wednesday.

The practice, in place at 15 of 17 Metro governments examined by the CFIB, allows for employees who don’t use their allotted sick days to save them for future, and in some case get paid out later. That concept, the CFIB argues, is wasteful and should be replaced with more economical and equitable short-term disability plans.

Only two municipalities, Burnaby and New Westminster, have short-term disability plans and do not allow workers to bank used sick days.

“Sick days should be used when people are sick,” said Richard Truscott, vice-president for B.C. and Alberta. “At the end of the day these provisions have turned into a perk and it is of significant benefit to employees in some municipalities. It is causing a rather large liability for taxpayers as a result.”

Richard Truscott, Alberta director for the Canadian Federation of independent Business.

Truscott said the study comes as many of the collective agreements in Metro Vancouver are under negotiation, and he hopes it gives labour negotiators impetus to redraw sick pay provisions.

“(Banking sick days) is simply a way for some municipal employees to achieve more time off without being ill. Obviously it makes sense for governments to have a safety net in place for those times when employees fall ill in the short term, but it can be accomplished in a lot simpler, easier and fairer manner by setting up short-term disability plans,” he said.

But public sector sick pay plans may be a better deal than the CFIB thinks, according to Mark Thompson, a professor emeritus of the University of B.C.’s Sauder School of Business.

“The notion of banking sick days is that if you bank them, then you won’t abuse them. There is always a risk with sick days when people pile them up, that they will take a stress day or there is snow on the mountains that they book off,” he said. “If they know that some day they know they will need those days, the theory is that won’t do that.”

Thompson said the CFIB has a vested interest in arguing public sector programs should be redrawn.

“The CFIB hasn’t provided a scintilla of evidence that this is wrong. They’ve just said that this is more generous than our members. Everybody knows that,” he said. “Just saying that it is more generous than we have and that you should take away a benefit they’ve negotiated is just an ideological argument. It isn’t a basis for public policy.”

Vancouver’s Acting Mayor Raymond Louie

Raymond Louie, Vancouver’s acting mayor, said the city tries to limit the effect of time-banking provisions in its collective agreements.

“You really need to look at the collective agreement in totality and the value for money proposition and not single out components and take them in isolation,” he said. “We have historically made moves to limit the unfunded liabilities that come through banked time and reduce those in a number of areas.”

In the examination of Metro Vancouver agreements, the CFIB found sick pay varies in detail. In Vancouver and Richmond, for example, employees are allowed 20 paid sick days a year. They can bank up to 261 of those days for future use. They also get one “gratuity day” each four months for unused sick days, up to a maximum of 120 days. The program has created a $35.7 million liability for Vancouver and a $17.3 million liability for Richmond, said Truscott.

At the other end of the spectrum, the District of North Vancouver allows the same 20 paid sick days, up to a maximum of 120, but doesn’t grant “gratuity days.” It has a sick pay liability of $700,000.

Truscott said Burnaby and New Westminster, which are both run by labour-backed councils, are on the right track towards providing equitable short-term disability for employees.

Louie called the CFIB study “lazy data analysis” and said the association was being mischievous.

“This is a continuing trend of the CFIB to highlight a very narrow segment of data and manipulate it to their advantage. I think their efforts do a disservice to proper data analysis. It is lazy data analysis on their part for sensationalism, really,” he said.

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